SYDNEY, AUSTRALIA — Dick Smith loves Vegemite. "I eat it every day for breakfast.... I'm just sticking my finger in it now.... Hmmmh!"
But about 18 months ago, Mr. Smith discovered that the company that makes the Australian icon - a salty, yeast-derived spread popular almost nowhere else in the world - is actually owned by US tobacco giant Philip Morris.
Enter Ozemite - Smith's new "genuinely Australian" version of the black sludge.
As one of Australia's best-known adventurers and entrepreneurs, he doesn't fit the antiglobalization archetype. But he is one of its champions, managing to turn societal discomfort with global homogenization into a business that in its first year recorded $38 million in sales.
Smith is tapping into what some see as a growing Australian frustration with two decades of economic reforms that have transformed a once heavily protected, inward-looking Australian economy into one now learning to compete on a worldwide scale.
"We were an insular society for a very long while, and a lot of people grew up with that," says Glenn Withers, a public policy specialist at Australian National University in Canberra. "[But] the shakeout of protection has left a lot of people hurt or feeling vulnerable from those changes."
At first glance what Smith is doing looks a lot like the "Made in the USA" campaigns of the 1980s. But Mr. Withers argues that what is happening now in Australia is different because of its historical context - Australia is now at a crossroads and which direction it takes will determine its economic future.
From its founding as a nation in 1901, until the early 1980s, Australia was essentially a protectionist haven, Withers says. Now that reforms are essentially done, Australians are facing the prospect of competing with the rest of the world.
That amounts to a wake-up call for a country whose psyche has been shaped in large part by its geographic isolation. And it has, almost predictably, led to knee-jerk reactions like the far-right One Nation Party. A xenophobic, rural-based party headed by former fish-and-chips shop owner Pauline Hanson, One Nation has emerged as a bumbling voice for disaffected conservative voters. It could, some analysts believe, prove the ruling conservative government's undoing at the next election, expected late this year.
Smith, Withers says, represents the business equivalent of One Nation. "Both of them are seeking to return to more-stable, known ways in the Australian way of life."
Smith, who made a fortune in an electronics retail business he sold long ago, recognizes the link. But he stresses that he doesn't agree with One Nation's isolationist ideas. "If I went into politics, a lot of those people would come to me. But I wouldn't vote for Hanson.... She's too extreme."
He enjoys quoting Karl Marx to explain how global corporations are beginning to "eat themselves" - though he insists he's an avowed capitalist. "I believe in free trade. But I believe free trade should be a balance of goods going in both directions."
On that point, the statistics don't necessarily bear him out - Australia's trade balance is only narrowly in deficit, according to the Australian Bureau of Statistics, and resource-rich Australia has long been an exporter. But the real question on Smith's mind is whether Australia itself will profit from its resources, or as multinational companies buy local firms, it will become a branch office of the world economy.
A series of recent mergers and takeovers - including a bid by global giant Shell to acquire Australia's largest homegrown oil company, Woodside - have awakened fears. And that has left Prime Minister John Howard and his government caught between those vocal sectors of the electorate that want it to react and the markets, which have sent the Australian currency down to record lows against the US dollar in recent months, at least partly because of the prospect of a turn to protectionism.
Australia is unlikely to raise tariff barriers any time soon; the debate is over subtler points. But Howard has been forced to toe a fine line between the two sides.
Whether Australians really have anything to worry about is unclear. Economists like to point out that foreign investment - $26.2 billion in the year to June 2000 - has grown in recent years mostly because of interest in the stock and bond markets, rather than as part of a massive buy-up of Australian companies.
But the phenomena being exploited by people like Smith and One Nation are very real, as is the fear of protectionism.
"You do have these definite worries that Australia may become a branch-office economy," says Craig James, an economist with Commonwealth Bank. "Overseas investors see that as a sign that the opportunities aren't there Down Under."
Meanwhile, Smith's company has rolled out its own peanut butter, cookies, and ketchup."
The company has grown so quickly that Smith, whose bespectacled face graces the labels on all his products, has vowed not to add anything else. But there is one yet to come - Ozemite is still in development.
The fact that Philip Morris division Kraft buys 98 percent of the Australian supplies of the crucial ingredient for Vegemite - brewer's yeast - has forced Smith to use baker's yeast. Getting the taste just right has been tricky, he says. And as Vegemite connoisseurs know, getting that peculiar taste just right is the most important thing. "It's getting there," Smith says, reassuringly.
(c) Copyright 2001. The Christian Science Monitor